Attac Jersey is a Member of the International Tax Justice Network. We are Members of the Association for the Taxation of financial Transactions for the Benefit of Citizens, (ATTAC) and the Tax Justice Network, (TJN). The aims of both organisations are to research, educate and campaign to further public awareness. We are seeking to alleviate poverty through the creation of just taxation systems to fund social goods.

Tuesday, March 29, 2011

TAX INFORMATION EXCHANGE AGREEMENT - INDIA
MONEY TRAIL NEGOTIATIONS

FROM:   Tony the Prof     tonymusings.blogspot.com
This question, asked today in the States, makes it clear that it was the wording and clauses of the original TIEA that were the problem, but it doesn't give away much of substance!

WRITTEN QUESTION TO THE CHIEF MINISTER BY DEPUTY R.G. LE HÉRISSIER OF ST. SAVIOUR
ANSWER TO BE TABLED ON TUESDAY 29th MARCH 2011

Question
What were the precise reasons given by the Government of India for not signing the Tax Information Exchange Agreement?

Answer

The issues that prevented the signing of a Tax Information Exchange Agreement (TIEA) with the Government of India in New Delhi on the 18th March 2011 arose from differences discovered between the TIEA we had negotiated and those that India had recently signed with other jurisdictions.

Because of the need for the representatives of the Indian Ministry of Finance and the Jersey delegation to clear points of detail with other relevant parties there was insufficient time available to resolve the issues concerned before the Treasury and Resources Minister had to leave New Delhi. We expect the issues to be resolved in early course. The TIEA will then be able to be signed and in due course it will be presented to the States for ratification. Only when the TIEA has been ratified by both parties will it come into force.

But what triggered this upset, after months of careful planning? This story in Monday's JEP gives a clue:

INDIA has asked for Jersey's help in an investigation into bribes allegedly paid to the country's former telecom minister for granting 2G mobile phone licences. The former minister Andimuthu Raja has been under investigation for some time, but the fact the Jersey authorities had been asked to help became public last week during proceedings in India's Supreme Court. And the news happened to coincide with a visit to Delhi by a senior delegation from the Island seeking to secure a tax information exchange agreement with the Indian government. (1)
The Financial Times also notes that:

Charges are to be brought against India's former telecoms minister and two companies suspected of corruption by the end of March, the country's investigating authorities have told the Supreme Court.

The Central Bureau of Investigation said on Wednesday that it was preparing charges against Andimuthu Raja, the former minister, for his alleged role in a corruption scandal that an official audit claimed had lost the national exchequer an estimated $39bn in revenues in the auction.

In a submission to the court, which is overseeing the investigation, the CBI said as many as 31 companies had been summoned for questioning, with 26 already having been examined. It also said that its investigation had sought information from overseas, including the financial centres of Singapore, Cyprus, Jersey and the Virgin Islands, and that it had raided the offices of 'hawala' money transfer operators

and the Hindu, another newspaper, reports that:

The Enforcement Directorate on Tuesday informed the Supreme Court that the money trail of the 2G spectrum allocation transactions was traced to six countries, and their links to foreign bank accounts were established

Letters Rogatory were sent to Singapore, Cyprus, Jersey, the Virgin Islands and two other countries (3)

Links(1)  http://www.thisisjersey.com/2011/03/28/jersey-to-help-in-probe-into-india-bribes-t
(2) http://www.ft.com/cms/s/0/72130720-4f9f-11e0-a37e-00144feab49a.html
(3) http://www.thehindu.com/news/national/article1540376.ece 

Wednesday, March 23, 2011

Tuesday, March 22, 2011



from Tax Research UK, Director Richard Murphy


 
WPP to quit Jersey?  And come back to the UK?  A double whammy!

 

Live Link:
  www.taxresearch.org.uk/Blog/2011/03/22/wpp-to-quit-jersey-and-come-back-to-the-uk-a-double-whammy

Saturday, March 19, 2011

From Tax Research UK, Director Richard Murphy


CHANNEL ISLANDS LVCR  FULFILLMENT INDUSTRY


This letter was published in the Guernsey Press today (but I can’t find a link as yet)

In your article “becoming a target of convenience” (4th March 2011) you seem to imply
that the Channel Islands LVCR fulfillment industry has become some kind of imaginary
scapegoat for the demise of independent UK music retailers. You say that “research” has
shown that supermarkets are the problem. Presumably the research to which you are
referring to is the boldly titled report Setting The Record Straight, which was announced
with much fanfare in the Channel Islands press a couple of weeks ago but which the
Guernsey Government seem to be very reluctant to let anyone see.

Needless to say I have been dealing with objections like this for a very long time. They
are exactly the kind of thing that people with a vested interest in seeing this immensely
distortive and unjust practice continue have been feeding to HMRC for years. So,
for the record: supermarkets entered the music market 15 to 20 years ago, serving
an entirely different part of the market (top 40 chart CDs aimed at young people or
those with a passing interest in music) to that served by most of the independent
sector (music for serious music consumers, leftfield and experimental bands, new
upcoming independent artists, back catalogue and collector music). Supermarkets have
not significantly changed their position in the market in the last 10 years. However,
online sales (of physical CDs, not downloads, which still remain marginal in the albums
market) have risen from 11.6% of the UK music market in 2006 to 29.6% in 2009.
2006 is a pivotal year because that was when HMV’s opening of a distribution centre
in Guernsey (in order to compete with Play.com) caused a stampede to the Channel
Islands. This increase has been disproportionate to the rate at which online sales were
growing before 2006, and far disproportionate to the growth in online sales of books, an
important control group because their exemption from VAT within the UK removes any
incentive to send them offshore.

A business like mine – Delerium Mail Order, a much respected specialist online CD
retailer – should have benefited from this shift to online, because it was a purely online
business. However, there are no independent online stores left onshore in the UK,
save for a few that are attached to high street stores in high footfall areas or selling
exceptionally niche product. Why? Because they have to charge VAT. My business
saw nothing but growth until 2006, then HMV opened its centre in Guernsey, all my
competitors went offshore, and I shut down at the end of 2007 as it became impossible
to retail CDs and charge VAT. According to the CEO of thehut.com, by 2009 96% of the
online music market was offshore.

But even so, there are now many other product sectors experiencing the same market
distortion caused by the abuse of LVCR. Retailers Against VAT Avoidance Schemes
(RAVAS) represents retailers from across many sectors who have the identical tale to
tell of VAT free Channel Islands based websites undercutting them purely through the
avoidance of VAT. The distortion in the market for CDs and DVDs and the destruction of

UK online retail is just an example of what happens when a tax avoidance scheme gets
out of control.

LVCR was never intended for the purposes of avoiding VAT and distorting competition
in favour of tax avoiders, a fact that whilst denied by those with a vested interest
was recently confirmed to me directly by senior HMRC officials. In a way, I feel
some sympathy for the Channel Islands in that that the islands’ position has been
unscrupulously exploited in this way by large retailers and its economy made dependent
to a large extent on an immoral industry that has completely misrepresented the central
tenants of the European Law that governs LVCR. To that end, even though neither I nor
my employees received any compensation when the UK government’s incompetence
and inaction destroyed my business, I would certainly not be against the UK government
helping the Channel Islands out if and when it chooses to end the exploitation of LVCR
via the islands. The UK Treasury will recoup the £100m-200m in VAT that it is now
losing. It would be appropriate if, for as long as is needed for the Channel Islands’
economy to readjust, some of this money could be used to provide some economic aid
to the Channel Islands population that was directly affected i.e. those who are least
able to defend themselves from the consequences of this kind of logistical tax deception.
The main benefit to the UK economy from ending LVCR is in stopping the distortion of
competition and the main benefit to the Channel Islands is to have a fulfillment industry
free from the spectre of tax avoidance.

It can fairly be argued that there would be an impact on the Channel Islands economy if
LVCR were to end. I would like to see the UK government address this in order to repair
the damage caused by its inaction in preventing the development of a Channel Islands
economy partly based on tax avoidance.
Small businesses call on EU to end Channel Islands tax loophole
 
Daily Telegraph, March 18, 2011
 
By Sean O'Hare
LONDON – In a strongly-worded letter to the European Commission, the Federation of Small Businesses (FSB) has called upon the EU to ensure that the UK Government brings an end to the abuse of Low Value Consignment Relief (LVCR).
In the letter, written on behalf of the Federation's 200,000 members, the FSB’s national policy chairman Mike Cherry describes the UK’s failure to protect VAT on internet retail as having “grave consequences for fair competition on the internet within the EU market” and calls on the commission to take firm action to ensure that the UK “ceases immediately from allowing such a flagrant tax avoidance scheme to continue.”
Read more...
 

Saturday, March 12, 2011




Treasury Minister Philip Ozouf's response in the Jersey Evening Post to Senator Alan Breckon's request to remove the Island's Goods and Services Tax from food and fuel.


Treasury Minister Philip Ozouf

SCRAPPING GST on food and household fuel bills would lead to the tax rising on other goods and cost the Island £8 million, the Treasury Minister warned today.
Speaking following the launch of a new bid to create the exemptions, Senator Philip Ozouf said that the matter had been debated six times by the States and rejected at every turn.

As reported yesterday, Senator Alan Breckon, the chairman of the Jersey Consumer Council which campaigns for a better deal for consumers, is calling on States Members to back his new proposal to remove GST from foodstuffs in line with the UK and domestic energy costs.

Article posted on 11th March, 2011 - 2.59pm

Thursday, March 10, 2011

10.3.2011  Senator Alan Breckon
PRESS RELEASE from Jersey Evening Post


Embargoed till 6am Thursday10th March 2011

 “SAY: NO TO GST”
It’s Not Over Yet!

New fight to rectify this injustice

I have lodged today a new proposition to remove GST from foodstuffs in line with the UK’s VAT arrangements as well as from domestic energy and fuel.

Old story: new fight: against background of changed circumstances.

In December 2010 a similar proposal was narrowly defeated by 26 to 24 votes (vote attached A). In the ensuing 3 months new and fresh information has come to light which I believe should tip the balance the other way and rid us of this insidious tax from these most basic and essential items, namely:

  • The  Review of the Fiscal Strategy Review
  • Company Tax versus Personal Tax figures, 2000 -2011

The Review of the Fiscal Strategy Review
The Corporate Services Scrutiny Panel’s “Review of the Fiscal Strategy Review (SR2/2011)” summarizes that the Treasury Minister does not have a “fiscal strategy” or an Economic Growth Plan. What the Minister has is an insistence of targeting individuals through
                                    20 means 20
                                    ITIS
                                    Impots
                                    GST
                                    Social Security Contributions
The Review adds that there should be no further increases in Income Tax, GST or Social Security unless an Economic Growth Plan is compiled and the aims of the Comprehensive Spending Review are met.

Company Tax versus Personal Tax figures, 2000-2011
If there is one table that people should read and digest this year it is the Company Tax versus Personal Tax figures, 2000-2011 table handed out to States Members during question time on 1st March 2011 (Attached B).
This extraordinary table details very clearly the shift of balance from Corporate Tax to Personal Tax

·         Company tax has been slashed from 52% in 2000 to an estimated 12% in 2011
·         Personal tax has doubled from 42% to an estimated 84% in 2011

This policy will cripple the local economy. As people’s spending power is reduced, the economy will spiral down – forget economic growth.




Retail Price Index
Adding to this, the RPI has risen by 2.3% for the 12 months from December 2009 to 2010:
However, within this,
  • Food rose by 3%
  • Motoring costs rose by 4% (the average prices of petrol / diesel rose by 11p / 12p per litre)
  • Fuel & light costs: rose by 5% (Domestic heating oil + 26%, gas + 17%)
More of the same is on the way.

Average Earnings
The rate of growth of average earnings in the private sector in Jersey has seen a downward trend over the last decade. The latest increase of 1.1% is the lowest recorded since private sector earnings were first reported separately in 1995. 1 in 7 households were found to be in the category of relative low income before housing costs, rising to more than 1 in 5 households after housing costs (Jersey Income Distribution Survey report 2009/10)

Pensioners
During 2010 single pension increases were limited to less than £2 per week which many found inadequate to meet the increases in their basic living costs. That is why this proposition seeks to highlight the plight of those on low and fixed income who are faced with difficult and life threatening choice – heating or medical costs. Pensioner households account for half (50%) of the lowest income quintile before housing costs, and for two-fifths (37%) of the lowest income quintile after housing costs (Jersey Income Distribution Survey report 2009/10).     How are they surviving?

UK versus Jersey Price Comparison 2010
  • Over the last 5 years food prices increased by 30% in Jersey, by 25% in the UK. The effect of the introduction of GST in May 2008 in Jersey is clearly apparent.
  • Direct food comparisons show that meat prices were, on average, about a quarter higher in Jersey than in the UK
  • Fresh vegetables were almost a third (31%) more expensive in Jersey than in the UK.
  • Since 2005, bread prices have increased overall by more than a third (35%) in Jersey.
  • Cereals have seen an overall increase of 38% in price in Jersey and of 25% in the UK.
  • Over the five years to June 2010, domestic energy prices rose by almost two-thirds in
Jersey (62%)

How can we expect the ordinary person to pay for GST on top of these rates of increase?

Conclusion
Since the introduction of GST in May 2008, the economy has changed. Consumer confidence reached an all time low as the recession bit into people’s spending power. Jersey did not respond   by helping the ordinary citizen but rather by penalizing the individual with crippling Income Tax rates, impots and of course GST.

All this when some companies are not making a fair, or any contribution, to the tax take.

Unless GST is removed from basic essentials it will continue onwards and upwards, the time to stop it is now!


For more information please contact
Senator Alan Breckon
Tel: 01534 618532
a.breckon@gov.je
A
Vote on GST Budget Amendment 9th December 2010
POUR: 24
CONTRE: 26
Senator B.E. Shenton
Senator T.A. Le Sueur
Senator A. Breckon
Senator P.F. Routier
Senator B.I. Le Marquand
Senator P.F.C. Ozouf
Connétable of St. Ouen
Senator T.J. Le Main
Connétable of St. Helier
Senator F.E. Cohen
Connétable of St. Lawrence
Senator J.L. Perchard
Deputy of St. Martin
Senator S.C. Ferguson
Deputy R.G. Le Hérissier (S)
Senator A.J.H. Maclean
Deputy J.A. Martin (H)
Senator F.du H. Le Gresley
Deputy G.P. Southern (H)
Connétable of Trinity
Deputy of Grouville
Connétable of Grouville
Deputy J.A. Hilton (H)
Connétable of St. Brelade
Deputy P.V.F. Le Claire (H)
Connétable of St. Martin
Deputy S. Pitman (H)
Connétable of St. John
Deputy K.C. Lewis (S)
Connétable of St. Saviour
Deputy I.J. Gorst (C)
Connétable of St. Clement
Deputy of  St. John
Connétable of St. Peter
Deputy M. Tadier (B)
Connétable of St. Mary
Deputy of St. Mary
Deputy R.C. Duhamel (S)
Deputy T.M. Pitman (H)
Deputy J.B. Fox (H)
Deputy A.T. Dupré (C)
Deputy of St. Ouen
Deputy M.R. Higgins (H)
Deputy J.A.N. Le Fondré (L)
Deputy A.K.F. Green (H)
Deputy of Trinity
Deputy J.M. Maçon (S)
Deputy A.E. Jeune (B)

Deputy E.J. Noel (L)

Deputy T.A. Vallois (S)































  • B Company Tax versus Personal Tax 2000 - 2011









  • Year Total general revenue income £m* Company Tax £m % Personal tax (IT + impots + GST) %

    2000 398 208 52% 166 42%

    2001 415 227 55% 181 44%

    2002 436 215 49% 198 45%

    2003 444 216 49% 218 49%

    2004 445 212 48% 212 48%

    2005 467 202 43% 242 52%

    2006 524 217 41% 257 49%

    2007 559 238 42% 290 52%

    2008 660 233 35% 352 53%

    2009 674 214 32% 391 58%

    2010 496 (E) 79 (E) 15% 362 (E) 73%

    2011 521 (E) 65 (E) 12% 436 (E) 84%

*2000-2006 Treasurer’s Report p.xi. Financial Report & Accounts, 2006
  2007-2008 Treasurer’s Report Table 2, p.7. Financial Report & Accounts, 2008
  2009 Treasurer’s Report Table 4, p.8. Financial Report & Accounts, 2009
 (E) Estimates Draft Budget Statement 2011 Summary Table B p.74

Tuesday, March 8, 2011



BBC GUERNSEY REVEALS ITS COMPLETE POLITICAL BIAS -                                 AGAIN


From Tax Research UK, Director Richard Murphy


Live Link  www.taxresearch.org.uk/Blog/2011/03/08/bbc-guernsey-reveals-its-complete-political-bias-again


THEY'RE REALLY TOLERANT OF OPPOSITION IN GUERNSEY -TO THE POINT OF DEMANDING IT MUST STOP -
                                            NOW                                                             

From Tax Research UK, Director Richard Murphy

Live Link  www.taxresearch.org.uk/Blog/2011/03/08/theyre-really-tolerant-of-opposition-on-guernsey-to-the-point-of-demanding-it-must-stop-now 

Sunday, March 6, 2011



THERE IS ALWAYS AN APOLOGIST FOR TAX ABUSE -
TODAY IT IS SAINSBURY AND TESCO


from Tax Research UK,  Director Richard Murphy



Live Link:- www.taxresearch.org.uk/Blog/2011/03/06/theres-always-an-apologist-for-tax-abuse-today-it-is-sainsbury-and-tescos 


Letter to the Jersey Evening Post

This gravy train is out of control

From John Heys. 

SO now we move from the realms of the absolutely unbelievable to those of the totally ridiculous.

Articles in the JEP of 2 March state that there will be an urgent review of vast amounts of our tax being thrown away on unnecessary positions held by people brought over from the UK on the gravy train. There should be no need for a review, as it should not have occurred in the first place. 

One such is a Mr McLaughlin, donated £216,000 after hasty downsizing from £312,000 with no real explanation from Health Minister Anne Pryke, who compounds the preposterous situation by actually proclaiming that she thinks it is good value. 

Why was his engagement increased from three months to two years? And why has yet another UK survey team been engaged to look into the health system at a snip of only £730,000?

It is reassuring to know that Mr McLaughlin’s money is not a salary, but only a contract for services and our Chief Minister states that the poor chap will not even get sick pay or a pension. How on earth is he expected to survive?

Another revelation regards a Baroness Ford, engaged to head the Jersey Development Company at a measly £40,000 for 24 days attendance, or £608,333 for a full year.

Senator Le Sueur keeps stating that these ridiculous situations are good value for the money, yet it is he who has warned us all that things are tough and we are all to cut back on expenditure, that there must be savings by the States.

Both must not wait until October, but do the decent thing and resign right now before they agree to more damage to this troubled Island of ours. We just cannot afford this continued mismanagement.
 
Article posted on 5th March, 2011 - 3.00pm

Thursday, March 3, 2011



TAX US IF YOU CAN . AFRICA EDITION


from Tax Justice Network. Director: John Christensen


Live Link   http://taxjustice.blogspot.com/2011/02/tax-us-if-you-can-africa-edition.html